Edmonton is currently a buyer’s market, according to the Canadian Mortgage and Housing Corporation (CMHC) Fourth Quarter 2016 Housing Market Assessment for the Edmonton census metropolitan area. The report states that slower economic conditions have reduced housing sales, resulting in longer selling times and shifting market balance in favour of the buyer.

An elevated supply of listings, coupled with slower sales, have led to longer selling times and put downward pressure on prices. According to the CMHC report, the median price of single-detached, semi-detached and apartment categories all declined on a year-over-year basis in the second quarter of 2016. The market for single-detached homes posted the largest decline, falling 2.2 per cent over the same time period.

“Edmonton has roughly seven months worth of inventory at the moment, and that is a clear buyer’s market — five months of inventory is considered a balanced market,” said Jeremy Amyotte, an Edmonton-based real estate agent with Remax Elite and owner of the Jeremy Amyotte Real Estate Team, in response to the CMHC report. “This means prices will continue to soften. What happens between now and spring will be interesting. Sales will drop this winter, but so will inventory levels. The rental market is going to strengthen a little. As a result, the sale market will benefit by the spring. However, in the meantime, buyers are going to see some deals this winter. I truly believe we’ll see prices bottom out this winter, before it starts to come back.”

Amyotte notes that reduced housing starts will help the resale market’s sustainability, while mortgage rule changes could boost October housing sales and bring them in line with figures from previous years.

“Areas that will continue to perform well include Capilano, Avonmore, Holyrood, Glenora, Parkview, and all communities near the ones mentioned,” Amyotte said. “Areas that will likely suffer most: Trumpeter, St Albert, Chappelle, Rutherford, Callaghan, and areas near them – areas on the outskirts.”

***

Report: Room for national real estate market growth

Despite continuing fear of a housing market crash, there is room for growth in the Canadian real estate market, according to the Emerging Trends in Real Estate 2017 report, jointly released by PwC Canada and the Urban Land Institute. The report notes that investments funnelling to the east and an increased focus on mixed-use developments will aid the real estate market in the coming year, despite concerns about a potential pullback in the Vancouver and Toronto housing markets.

According to the report, a nationwide dip in residential sales can be attributed to housing affordability, weak income growth, and high consumer debt levels. Canada’s average housing prices are expected to decline by 0.9 per cent in 2017, compared to a significant increase of 10.6 per cent in 2016. Toronto and Vancouver are expected to suffer the brunt of the downward trend in housing prices, while the Halifax, Ottawa and Quebec City markets are expected to grow slightly.

“Opportunities in the Canadian market continue to be abundant, but no two markets are the same,” said Frank Magliocco, partner and national real estate practice Leader, PwC Canada, in a press release. “The unique economic and demographic realities in each region are yielding different options for savvy real estate investors across the country who have their eye on emerging needs and trends in the market.”

As for Alberta’s capital city, the report forecasts that Edmonton’s GDP will contract slightly in 2016, as low oil prices contribute to slower activity in a number of sectors. A sluggish economy has softened the local real estate market, although Edmonton has a rosier outlook than other Alberta markets thanks to increased infrastructure spending and the downtown core’s redevelopment efforts.

Edmonton’s resale market is also solid in comparison to others around the province. However, while housing remains relatively affordable the report indicated that housing starts are expected to slow, as homebuilders hold off on new development until excess inventory can be absorbed. Those conditions could lead to a reduction in residential construction projects during 2017.

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